For many of us, a SatNav is an essential part of everyday life. Whether we are setting out on a new journey or retracing one we have done many times before, we reach for the comfort of the SatNav as soon as we get in the car.
We need the reassurance of having something which shows us exactly where we are going, how long it is going to take, whether there is anything enroute that could slow us down and whether there is an alternative route if there is.
In these times of economic uncertainly, wouldn’t it be good, and wouldn’t life be so much less stressful, if you had the reassurance of a SatNav for your own business journey?
Something that could tell you where you are now and which could be “set” to reflect your business goals and personal ambitions; something against which progress could be monitored and something that would highlight potential problems ahead so corrective action can be taken, ensuring you arrive safely at your chosen destination.
Well, the good news is that a well-crafted Business Plan and a robust set of financial projections can do just that.
Just like you do when you set out on any big adventure, you need to start with the end in mind and first decide where it is you are trying to get to.
The process of developing a Business Plan will help you formulate your vision for what the business will look like in the future so that you can identify what needs to be done, by when and by whom for that vision to become a reality; together with the resources that will be required along the way.
Once you know where you are trying to get to, the Financial Projections show you whether the Business Plan is financially viable and, to be of true value, they should be made up of three elements.
Firstly, you need a projected Profit and Loss account, which shows, in monetary terms, what the business hopes to do in the future and whether, in terms of the effort and risk, it is worth doing.
From there you can build a projected Balance Sheet, which will provide a snap shot of the business at a future point in time in terms of what it will own, and what it will owe to bothyou, as its owner, and other people.
Finally, a cashflow forecast will show you how much money will be required to support the activity you are planning and, more importantly, whether the business can afford to do it.
Once you have your Business Plan and some robust Financial Projections, then you have a route-map to help you get to where you want to be; a reference document that you can keep referring back to, but it is no good if it just sits in drawer or on a shelf gathering dust; just like your SatNav is of no value if you turn it on when you get in the car and then just ignore it.
As a small business owner, it is so easy to get sucked in to “doing the doing” and lose sight of your end goal and the reason you started out on your journey in the first place. Try and make sure that you schedule time to work “on” the business, not just “in” it.
My top tip would be – take your plan and your forecasts out of the office every month for couple of hours; to your favourite café, park bench, local beauty spot etc. – it doesn’t matter where you go if you use the time to review the progress you are making against your plan. Ask yourself, are you doing the things you said you would do and getting the results you wanted? If you are, that’s fantastic; just keep doing them.
If you are not, then it is time to consider whether you need to re-plot your route and do something different to move you towards achieving your business goals – after all, as Einstein said, the definition of insanity is doing things “…over and over again but expecting different results”.
Wherever you are on your business journey; whether you are just starting out or your goals and aspirations have changed and you need to refocus, it is never too late for you to start developing your own business “SatNav”. Those owners who have a plan, that they are reviewing regularly, have a much better chance of successfully navigating a route to their chosen destination.
